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Amerigo Vespucci Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 04:02 PM
Original message
Countrywide reportedly under FBI investigation
Source: CNN

NEW YORK (CNNMoney.com) -- The FBI has launched an investigation into the lending practices of battered home lender Countrywide Financial Corp., according to a report in The Wall Street Journal. The mortgage company is suspected of widespread fraud, the paper said, which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.

The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

When the housing crash began, Countrywide (CFC, Fortune 500) was faced with an increasing number of subprime customers who were delinquent with their mortgage payments. The company was forced to essentially shut down its subprime lending operations last year to focus on originating loans that conform to Fannie Mae (FNM) and Freddie Mac (FRE, Fortune 500) guidelines, considered to be safe investments.

On Friday Countrywide's founder and former CEO, Angelo Mozilo, testified before the House Committee on Government and Oversight Reform, along with two other CEOs who resigned in the wake of the mortgage crisis -- Charles Prince of Citigroup (C, Fortune 500), and Stanley O'Neal of Merrill Lynch (MER, Fortune 500). All three defended their lofty compensation packages, despite the loss of billions to their companies and shareholders.

Read more: http://money.cnn.com/2008/03/08/news/companies/countryw...
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yourout Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 04:06 PM
Response to Original message
1. The "Lend at all costs" attitude of the big financial groups....
is in large part responsible for the mortgage mess and the economy tanking in general.
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WarholPop Donating Member (61 posts) Send PM | Profile | Ignore Sat Mar-08-08 04:09 PM
Response to Original message
2. A Good Start
The mortgage crisis is just the first shoe to drop.

The next shoe to drop is the credit card crisis. Many credit card companies,including Washington Mutual, are under congressional investigation for risky credit practices, exorbitant interest rates, unfair fees and penalties. The Attorney General of New York further is investigating these credit card practicies. Balances on these cards, delinquencies on these cards, and defaults on these cards are rising, and the United States credit markets are not looking good.

I don't see how the general economy and the welfare of ordinary Americans can withstand this double whammy: mortgage crisis and credit card crisis.

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sarcasmo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 08:27 PM
Response to Original message
3. This is only the tip of the iceberg. Kick and Nom.
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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 08:40 PM
Response to Original message
4. We left them in Oct.

They wanted $4,000 in fees to refinance our rental property. K&R!

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unblock Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 08:44 PM
Response to Original message
5. finally, the focus is where it belongs -- on the originators
i'm tired of people blaming wall street for taking mortgages that were SUPPOSED to adhere to certain criteria simply for repackaging them. why should they be blamed when the mortgages didn't adhere to the criteria in the first place? wall street and investors were the VICTIMS of the fraud perpetrated by the originators.
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 09:57 PM
Response to Original message
6. Not Countrywide!
Wow, what a complete and total shock!

:sarcasm:
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NM Independent Donating Member (794 posts) Send PM | Profile | Ignore Sat Mar-08-08 10:40 PM
Response to Original message
7. Not surprised a bit...
...it's going to get a lot worse.

What angers me, is that we all know that no matter how badly these corp's have behaved, WE are going to have to bail them out.

Even after they changed the laws so nobody else has that luxury anymore.

They're getting their just rewards. Fuck 'em, I just hope we don't have to pay for it like we did with big oil and the airlines ad nauseum
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WarholPop Donating Member (61 posts) Send PM | Profile | Ignore Sun Mar-09-08 12:15 AM
Response to Reply #7
8. you're right on . . .
It's so typical. When corporate America gets into trouble, the taxpayers have to bail them out and their over-priced CEOs. However, Heaven forbid if a working stiff gets behind on his credit cards . . . the credit card companies made it even more difficult for average consumers to declare bankruptcy. And yet these banks are the first ones to hold out their hands to the government in order that they themselves do not go bankrupt.

Anyone want to ask me why I support higher taxes for corporate America? I'll tell you: because they get the most benefits. If these banks want a bailout, then they should have to pay it back with higher tax rates on their profits.
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NM Independent Donating Member (794 posts) Send PM | Profile | Ignore Sun Mar-09-08 06:10 AM
Response to Reply #8
9. Exactly
Changing the bankruptcy laws is a "punishment" to those not responsible with their credit.

When we the tapayers bail out the banks, it will be because those not responsible with their credit took loans they shouldn't have, and now the banks are having to pay for it.

Just watch...the Repug Spin is utterly amazing at times.
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sarcasmo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-09-08 07:04 PM
Response to Original message
10. Shouldn't they investigate Fannie May too?
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Deja Q Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-09-08 07:32 PM
Response to Original message
11. Awesome news.
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